PRC-1 · Chapter 6 · Question 1 of 100
According to IAS 16, which of the following criteria must be met for an item to be classified as Property, Plant, and Equipment (PPE)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) It must be a tangible item held for use in production, supply of goods/services, rental, or administrative purposes, and expected to be used during more than one period.
Explanation
PPE refers specifically to tangible non-current assets that a business uses in its operations (production, rental, or administration) and expects to use for more than one accounting period.
More Property, Plant and Equipment MCQs
- Q3At what point should an entity COMMENCE the depreciation of an item of property, plant, and equipment?
- Q4Which of the following costs should be EXCLUDED from the initial capitalized cost of a newly acquired machine?
- Q5How should refundable sales taxes (e.g., input VAT) paid on the purchase of a non-current asset be treated in the accounting records?
- Q6Which of the following is considered a 'Capital Expenditure'?
- Q7If a business incorrectly records the purchase of a new computer (capital expenditure) as office stationery (revenue expenditure), what is…